The board voted last month to raise the tax rate 26 percent, both to plug a $37 million hole in the budget from the tax digest and also to restore the county’s reserves.
“Moody's believes that additional revenue generated by the recent tax rate increase, in addition to nearly $130 million in expenditure cuts that occurred over the last three fiscal years, will result in sound cash balances by year end,” the agency analyst wrote about DeKalb.
At least, that is the plan. Moody’s continues to view the county’s financial outlook as negative as the agency waits to see if the year ends on Dec. 31 with the $17 million to $22 million in reserves.
“They are looking to see what the results really are, but they are acknowledging what has been done,” said county finance director Joel Gottlieb.
Moody’s also calls for the county to set up “formal cash management practices and operating policies” to get its financial house in order. Among the changes: DeKalb should no longer shift money among various accounts through the year to keep the general fund in the black.
DeKalb is responding by issuing its first tax-anticipation notes, a short-term debt, since 2000 later this month. Borrowing $150 million, and paying it back with property tax revenue by year end, will solve the problem of shifting money.
Moody’s rewarded the change Monday by giving the county its highest rating, MIG 1, on that borrowing.
“Our next step will be to show we are capable of making the necessary adjustments to look forward to an upgrade,” said Chief Executive Burrell Ellis. “For a local government, to maintain your rating in this climate is outstanding.”